Tomorrow’s Homeowners
“We all have an interest in making sure that today’s student loan borrowers will be able to fully participate in the economy as homeowners, entrepreneurs and productive members of the American workforce,” Rohit Chopra, the student-loan ombudsman for the federal government’s Consumer Financial Protection Bureau, said in an interview.
While income-based plans can be helpful to customers in their early years of repayment, paying over a longer period of time can increase the cost of borrowing, said Patricia Christel, a spokeswoman for Newark, Delaware-based Navient Corp., the largest servicer of federal loans and previously a part of SLM Corp., known as Sallie Mae.
Raskin has experience dealing with consumer debt. As Maryland’s top financial regulator from 2007 to 2010, she successfully pushed for legislation that cracked down on the short-term “pay-day” lending that often saddled borrowers with interest rates of more than 600 percent a year. She helped rewrite the state’s foreclosure process, imposing penalties for mortgage fraud and giving homeowners more time to try to avoid foreclosures.
Gridlocked Congress
With 40 million Americans having student loans, and while Congress is too gridlocked to legislate solutions, Raskin is in a position to help consumers who may face another wave of unsustainable debt, according to analysts and her former colleagues.
“At the Fed, you could look at it and think about it, but you couldn’t do much directly about it,” Elizabeth Duke, who served on Fed Board of Governors with Raskin, said in a phone interview. “At Treasury, she can affect implementation of the solutions she comes up with.”